Economic losses from climate change much higher – ADB

MANILA, Philippines - Economic losses from the impact of climate change in Southeast Asia could be 60 percent higher than previously estimated, reducing the region’s gross domestic product (GDP) by up to 11 percent by 2100, according to a new Asian Development Bank (ADB) study.

The analysis is an update to a 2009 ADB report that estimated a seven-percent annual reduction in economic output due to climate change.

Earlier, the World Health Organization (WHO) estimated that worsening climate change and the alterations on the weather patterns could result in two percent reduction in GDP.

The United Nations Office for Disaster Risk Reduction (UNISDR) said the Philippines was fourth in the world among countries hit by the highest number of disasters over the past 20 years.

A total of 274 disasters were recorded in the Philippines from 1995 to 2015, trailing the United States (472), China (441) and India (288).

Meanwhile, ADB chief economist Shang-Jin Wei said the economic costs of not reining in greenhouse gas (GHG) emissions are more serious than previously estimated.

 “At the same time, this new study also shows that reducing emissions and stabilizing the climate will produce benefits and avoid losses for Southeast Asia, which in the long run sharply outweigh the costs of action,” Wei said.

The study notes that costs of climate stabilization will rise by 60 percent in 2050 if a global climate agreement to curb carbon emissions is delayed by just a decade.

The study looks at the economic impact of climate change across a range of scenarios, including business-as-usual, and another which sees countries take steps to limit their green house gas emissions to keep temperatures from rising above two degrees Celsius.

The global analysis focuses on the region’s five largest economies, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, which account for 90 percent of the region’s emissions.

The study quantifies the net benefits to the region from acting to stabilize the climate, which are estimated at as much as five to 11 times more than the net costs.

It assessed direct benefits from less climate change, such as improved crop yields, as well as the effects of improved air quality and better transportation that come directly from steps to reduce emissions.

Those steps are also found to cost less as a share of GDP than the region has already been spending on energy policies, such as fossil fuel subsidies.

Reducing emissions will require action on a number of fronts, including a sharp reduction in the rate of deforestation, which accounts for the majority of Southeast Asia’s current emissions.

Averting deforestation represents the lowest cost opportunity for emissions reductions and could generate half of the cumulative regional mitigation through the mid-2030s.